CHART OF THE DAY: The US Household Balance Sheet Hasn't Been This Strong In 10 Yearshttp://www.businessinsider.com/deutsche-bank-household-balance-sheet-2012-7/comments
en-usWed, 31 Dec 1969 19:00:00 -0500Tue, 03 Mar 2015 15:29:05 -0500Mamta Badkarhttp://www.businessinsider.com/c/4ffba5cdeab8ea0c43000004CahnMon, 09 Jul 2012 23:47:25 -0400http://www.businessinsider.com/c/4ffba5cdeab8ea0c43000004
On "demand for retail space is weak, and the vacancy rate at strip centers has barely improved wrote Rosenberg," here is a link that provided more perspective:
<a href="http://www.reuters.com/article/2012/07/06/us-usa-realestate-reis-retail-idUSBRE86505220120706" target="_blank">http://www.reuters.com/article/2012/07/06/us-usa-realestate-reis-retail-idUSBRE86505220120706</a>
Notably,
"Although we still remain hesitant to claim that the market has reached stabilization, two consecutive quarters of vacancy and rent improvement is the strongest evidence to date that the sector is on the road to recovery," Ryan Severino, Reis senior economist, said in a statement.
But "while demand for space is weak, the firm said, new construction is even weaker."
"Larger regional malls, meanwhile, recorded a drop in vacancies to 8.9 percent, while rents rose for the fifth quarter running."http://www.businessinsider.com/c/4ffb9f17eab8ea7b31000001Elron AvenMon, 09 Jul 2012 23:18:47 -0400http://www.businessinsider.com/c/4ffb9f17eab8ea7b31000001
Joe Sixpack is paying down his debt and deleveraging as fast as he can. With job security being tenuous, maintaining debt is a huge potential liability. As much as the govt wishes this would stop and people would spend like dervishes, the lessons of this depression are going to last a LONG TIME.http://www.businessinsider.com/c/4ffb557469bedd0e2600000bJoe Biden Mon, 09 Jul 2012 18:04:36 -0400http://www.businessinsider.com/c/4ffb557469bedd0e2600000b
I just strengthened my personal balance sheet by saving on my medical bills. Instead of wasting co-pay money on the doctor, I bypassed him by giving myself my own proctology exam. I am proud to report that I am still the perfect asshole.http://www.businessinsider.com/c/4ffb53f9ecad045a38000004black swanMon, 09 Jul 2012 17:58:17 -0400http://www.businessinsider.com/c/4ffb53f9ecad045a38000004
Look, the city of Scranton just strengthened it balance sheet:
"The infamous city of Scanton, PA has had financial troubles for a couple of decades - losing population since the end of WWII - but as NPR reported this weekend, the $16.8 million budget gap that Mayor Chris Doherty is trying to fill (and the disagreements between his taxation proposal and the city council's borrow-more-money view) has driven the mayor to an incredible action. Doherty has reduced everyone's pay - including his own - to the state's minimum wage of $7.25 per hour. In an ironic choice of words, the desperate mayor noted: "I'm trying to do the best I can with the limited amount of funds that I have," Doherty says, "I want the employees to get paid. Our people work hard — our police and fire — I just don't have enough money and I can't print it in the basement." NPR continues, After paying workers Friday, the city had only about $5,000 left in the bank. More money flowed into city accounts that day, but it was still not enough to pay the $1 million the city still owes to its nearly 400 employees.
This is, of course, stressful on the union workers affected as one firefighter notes: "[The] kids aren't going to be able to do certain activities this summer — maybe we're not going to be able to go on vacation" (to Italy we wonder?) and "we want to make sure that [Obama and Biden] know there's a Democratic mayor that's not taking care of his public safety unions,"http://www.businessinsider.com/c/4ffb516e6bb3f7bb5e000004black swanMon, 09 Jul 2012 17:47:26 -0400http://www.businessinsider.com/c/4ffb516e6bb3f7bb5e000004
A friend of mine, who is on the City Council, stopped making the payments on his $850,000 mortgage almost three years ago. His still lives in the ocean front house and his balance sheet looks much better after getting rid of his largest liability.
Donald "The Donald" Trump and his different corporate entities have filed for bankruptcy four times (1991, 1992, 2004, and 2009). Each time he did so, he improved his balance sheet.http://www.businessinsider.com/c/4ffb5074eab8eaa50a000002miguelsamudio7Mon, 09 Jul 2012 17:43:16 -0400http://www.businessinsider.com/c/4ffb5074eab8eaa50a000002
This just confirms the theme in the book "The big Crash Ahead" and "The Balance Sheet Recesion". Baby Boomers are retiring, lost a lot of money in their 401K's, home values crashed (the retiring cushing), have home equity loans and many unemployed. They are starting to save as they do not feel secure about their future, uncertainty about social security and health care. From last friday's jobs report, they are posponing their retiring. People is starting to deleverage - pay their loans - and save. Not just people, also corporations. Their balance sheet have long cash balances to the tune that some banks (i.e. Bank of NY) are charging clients to hold their cash. We are in very uncertaing moments with Europe and their possible disolution, China with a hard landing real state crash, the middle east as usually unpredictable and in America with our upcoming presidential elections and "Fiscal Cliff" in January 2013.http://www.businessinsider.com/c/4ffb3488ecad04a87a000015nwcynicMon, 09 Jul 2012 15:44:08 -0400http://www.businessinsider.com/c/4ffb3488ecad04a87a000015
What Duche Bank doesn't seem to remember is that US citizens are still going thru a financial collapse worse than the Great Depression (great recession my ass), still seeing their housing values decline (in most of the country) and have very limited prospects on the job front - while now dealing with massive inflation thru out their entire basket of necessities (food, rent, gas, insurance, etc).
This continued paying down of debt will continue for a very long time. Those that lived thru the Great Depression NEVER took on debt again. they learned their lesson, paid everything in cash and only bought what was absolutely necessary - obsessively frugal. A credit driven economy didn't come back until their offspring started using credit.
Sorry Duche Bank, you have to wait for the Y-Gener's to have kids and they grow up to be stupid enough to leverage themselves with debt before we have another credit driven economy.http://www.businessinsider.com/c/4ffb31876bb3f7b622000004JakeMon, 09 Jul 2012 15:31:19 -0400http://www.businessinsider.com/c/4ffb31876bb3f7b622000004
How can they seriously think that household liabilities are going to drop when Obama's energy plan calls for costs to "necessarily sky rocket"? After the mortgage, a households biggest expense is energy, then food. Both of which will continue to be more expensive because of Obama's EPA.http://www.businessinsider.com/c/4ffb281b69bedd3a3300000cDepressionMon, 09 Jul 2012 14:51:07 -0400http://www.businessinsider.com/c/4ffb281b69bedd3a3300000c
If US household blance sheets are strong , then prisoners in jail are virtuous for their self confinement ...
How many Americans have been shut out of credit card access ? How many people have been denied home loans and now have to save up at least 20% for a down payment ? How many Americans have taken their money out of stocks because they are growing distrustfull of instutions that controll their money ( LIBOR scandal ) .....
Remember ,as economies grind down , access to credit decreases and cash becomes more imporant ...So liquid assets rising isn't always a sign of good things .http://www.businessinsider.com/c/4ffb27d8eab8ea0524000019WaltMon, 09 Jul 2012 14:50:00 -0400http://www.businessinsider.com/c/4ffb27d8eab8ea0524000019
Aren’t they insolvent like all the rest?http://www.businessinsider.com/c/4ffb27bb6bb3f7e712000013jamesusnvetMon, 09 Jul 2012 14:49:31 -0400http://www.businessinsider.com/c/4ffb27bb6bb3f7e712000013
People are finally starting to live within their means. They finally understand that the banks want them as debt serfs and they are doing what it takes to make sure that is no longer the case. I got rid of ALL of my debt last year, no car payments or credit cards. This year I will be getting a mortgage as I am buy a house. However that is it, I do not intend to be a slave to debt. I will pay off my fixed rate mortgage as soon as I can and with the help of helicopter Ben that will probably be sooner rather than later when they start kicking on the printing presses next year to try and stave off the carnage to come.http://www.businessinsider.com/c/4ffb2795ecad04ab6200000celmoMon, 09 Jul 2012 14:48:53 -0400http://www.businessinsider.com/c/4ffb2795ecad04ab6200000c
I wonder how liquid those liquid assets would be if households tried to liquidate them.http://www.businessinsider.com/c/4ffb2634eab8ea7a2300000bMikentMon, 09 Jul 2012 14:43:00 -0400http://www.businessinsider.com/c/4ffb2634eab8ea7a2300000b
I'm glad Deutsche Bank thinks so. They must be checking in with their friends in the 1%. I suggest that they focus their study on Main Street next time.